Saturday, October 05, 2013

Tong Kooi Ong touched on how he had to sell Phileo Allied Bank

I used to have an account with Phileo Allied Securites as well as Phileo Allied Bank. I even had a computer supplied by the bank to gain access to trading prices and to trade online. It was innovative then as Phileo was the first bank to be able to do so, with much limitations when compared to what we have now, from other banks.

It was rumoured then that Tong was under pressure to sell off his stockbroking firm and bank to Malayan Banking Bhd., which many believed had something to do with his close connections with ex-DPM, Anwar Ibrahim. That he was under pressure then (though not the political part) was confirmed in his latest article, 'Say NO to Corporate Kings'...

Excerpt:

"The role of every Government is to do what is best for its people.  “What is best” is often debated, lacks clarity and changes over time.  Besides, it differs from one person, or group of persons, to another.

Luckily, there is no ambiguity in economics.  “What is best for the consumer” is more choices, lower prices and better quality. Clear, concise and quantifiable.

Yet, why is it so difficult for many Governments to deliver what is best for the consumer? Why can’t Governments deliver something as simple as what is best for the people in terms of goods and services?"

"Nothing is more real than personal experiences, where anti-competitive behaviors come in different forms. Let me share a few.

In 1995 when PhileoAllied Bank introduced online banking and stockbroking, the Kuala Lumpur Stock Exchange tried to stop this innovation by going to the courts. The reason was to protect their market share and commission rates.

And after the successful launch of OneAccount in 1996, the first current account that pays fixed deposit interest rates, Bank Negara stopped the launch of the OneCorporate account that would have given companies the same benefit. A few large banks protested.

In the name of consolidation of the banking sector, an innovative, technologically superior and profitable bank was forced to be sold in 2001.

More recently, on 20 August 2013, The Edge Communication received approval for its application of a publishing permit to publish a general daily newspaper, FZ.

On 28 August 2013, we received another letter from the Ministry that said “Penangguhan Permit Penerbitan”. The approval we received just a week earlier was now “deferred”. No reason and no indication for how long was given.

What happened during the one week, between 20 August and 28 August 2013? Three guys, each involved in separate media companies, met together and with others.

By 23 August 2013, I was already informed of the contents of the Home Ministry letter of 28 August 2013. The CEO of The Edge Media Group was told by one of the three guys.

The Government, which regulates the private sector, has now become “regulated” by such powerful private sector elites.

More important is the question WHY. Is it good for the consumer and the public?

Looking back at history, I entered into a partnership with the Berjaya group to combine The Edge and TheSun in 2002.  TheSun was turned around and Berjaya wanted to part ways in 2008.

In recent times, I have been approached if I would consider buying TheSun again.

I was also asked if I would consider partnering The Malay Mail and Malaysian Reserve.

FZ getting a license to publish a general daily newspaper would obviously be a threat to other publications. It will also remove a “rent-seeking” opportunity to some others who might profit from selling their licenses."

More:
http://www.tongkooiong.com/2013/10/say-no-to-corporate-kings.html

Link

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